Welcome to the This One Works blog, where you can find the latest updates on our free online tutorials, our auto trade status and general market commentary.
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The markets soared on positive economic data Thursday both in the U.S and abroad. The Dow added 254.75 points to close at 10,269.47. The SPX gained 30.96 points to finish at 1,080.29. We have no play but are looking to do something after the jobs report Friday.
Economic news out China got things off to a good start Wednesday, which was followed up by better than expected data in the U.S. Chinese manufacturing activity in August rose slightly, ending a three-month slide. In the U.S. the ISM Mfg. Survey was also higher, rising to 56.3 in August, easily surpassing expectations for a figure of 53.0. A reading above 50 is considered expansionary and this index has been above this key level since July 2009. The employment component of the index moved above 60, showing strength in job creation in the manufacturing sector.
The not so good news on the economic front was the Challenger report showed that just 34,768 job announcements were made in August. This is down from 41,676 in July and less than half the figure from a year ago. However, a slowdown in job cuts isn’t leading to hiring with the ADP Employment data showing a loss of 10,000 private payrolls during the month…..but traders just looked past this figure Wednesday.
Today, Thursday, will see data on jobless claims, pending home sales and productivity and costs. All of these could impact trading, so it will be interesting to see if stocks can sustain Wednesday’s gains or if traders will play it safe ahead of Friday’s big employment report.
Until next time.
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Posted by
Trading Desk at
September 1, 2010 | Category
general
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After a fairly busy open the markets closed near the flat line Tuesday. The Dow added 4.99 points to close the session at 10,014.72. The SPX finished flat at 1,049.33.
Stocks were mostly higher Tuesday until the Fed minutes were released late in the session. These minutes showed that the Fed might not be as ready to act with stimulus as some had hoped. After his speech last week in Jackson Hole, Bernanke seemed to be saying the Fed is ready to act. However, there was a lot of debate at the last Fed meeting with the committee stating things would have to get worse before they would act.
In other economic news, the Chicago PMI fell to 56.7 in August from 62.3 in July. However, this was above estimates for a reading of 56.0 and remains in expansion territory above 50.0. The S&P Case-Shiller home price index was positive, rising 1.0 percent month on month and up 5.0 percent compared with the year ago period.
August was not kind to the market indices with all down more than four percent for the month. However, support is holding as traders put their focus on the employment data due out at the end of the week and we keep in out trading range.
Until next time.
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It was another busy day on the markets Friday, but this time the bulls had the upper hand. The Dow gained 164.84 points to close the session at 10,150.65. The SPX added 17.37 points to finish the week at 1,064.59. We held back on our play last week waiting for this rally to pan out, so we’ll be looking to do something shortly.
Economic news and Bernanke were the focus Friday. Second quarter GDP came in at growth of 1.6 percent, a large decline from the initial report of 2.4 percent. However, economists were expecting a drop to 1.3 percent growth. Overall, GDP growth sits at 3.0 percent compared with the year ago period and domestic demand was strong at growth of 4.3 percent. Consumer sentiment in August came in at 68.9, down from the mid-month reading of 69.6, but up from July’s figure of 67.8.
Fed chairman Bernanke said that the economy is still growing, albeit at a slower pace than anticipated. He noted that the Fed stands ready to add stimulus if necessary. Traders viewed his comments as assuring, which provided some strength for stocks.
On tap next week are a couple of market moving Gov economic reports. The primary report will be on Friday when the government presents another snapshot of the labor market when it reports employment data for August. The picture isn’t looking any prettier. Economists forecast the U.S. gained a meager 49,000 private-sector jobs after factoring out the layoff of temporary Census workers. The jobless rate could tick up to 9.6% from 9.5%, a number that would look far worse if it included the people who are too discouraged to look for work. While any hiring is better than none, the U.S. needs to add almost 150,000 jobs a month to absorb the natural increase in the working population and drive down the unemployment rate. Some 8.2 million Americans lost their jobs during the height of the recession in 2008 and 2009. What’s far from clear is who will do the hiring.
I think we may see a little more of this rally over the next few days, but unless economic news is very good, the SPX has some serious resistance at the 1086 level and it will be troubled to get above it. If economic news not good then most likely that the SPX will resume its move downwards.
Until next time.
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The bulls finally came back Wednesday, erasing early losses following disappointing economic data. The Dow added 19.61 points to close at 10,060.06. The SPX added 3.46 points to close at 1,055.33. We have no play and are just waiting to see what happens for the rest of the rest of the week.
The session got off to another rough start thanks to the release of new home sales and durable goods orders. Both fell well short of expectations, elevating the concerns traders have about a double dip recession. However, support ultimately held for the major market indices, leaving them inside their respective trading ranges.
Durable goods orders for July did rise, but only 0.3 percent when estimates were for a gain of 2.5 percent. However, June’s initial loss of 1.0 percent was revised higher to a decline of just 0.1 percent. Nondefense capital goods orders excluding aircraft, a proxy for business spending, fell 0.8 percent. Although this component did see a strong 3.6 percent jump in June. Year on year, durable goods orders rose 9.3 percent, but this was down sharply from the 17.1 percent gain seen in June.
Another disappointing report came from new home sales in July. The existing home sales data on Tuesday sent stocks lower and initially, so did the weak report on new home sales. Sales during the month came in at an annualized rate of 276K units, down from a revised 315K in June. The consensus was for sales to come in at 340K. The July reading is the lowest on record and pushed the supply figure to 9.1 months from 8.0 months in June. The median price for a home came in at $204,000, which is a low not seen since 2003.
Today’s (Thursday) session will be interesting with eyes on the weekly jobless claims release. Last week, this report rose to 500,000, showing continued weakness in the jobs market. If this number is decent, the bulls might be able to gain some momentum. If not, resistance will be tested once again for the major market indices.
Until next time.
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Our next trade will have no downside risk and so a continued bear market will be good for our profits. The Bears control trading once again Tuesday on disappointing economic news. The Dow fell 133.96 points to close at 10,040.45. The SPX gave up 15.49 points to finish on 1,051.87. Worse than expected economic news on existing home sales left traders in a selling mood Tuesday.
However, the major market indices did hold support just, keeping them inside their trading range. We have been talking for several weeks now that after failing to hold their break of resistance that the major market indices would likely trade in a range. We need to now see if that range holds and then we can determine how to place our next trade.
Existing home sales for July fell 27.2 percent compared with June with the year on year decline at 25.5 percent. Sales came in at an annualized rate of 3.83 million units, well below estimates for a reading of 4.65 million units. This is the lowest rate for existing home sales since 1995 its worse reading in 11 years.
Wednesday’s session today will probably be at the mercy of economic data with new home sales and durable goods orders coming out. Traders will also get information on home prices. Expectations are for new home sales to actually rise slightly and for durable goods orders in July to show a 2.5 percent gain.
Until next time.
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Hopefully you all copied our trade in August and should be sat on a very nice profit for doing absolutely no work!
We love hearing about how much money our subscribers are making, and so in this post we have a question:
How much did you make on this trade?
(if you don’t know – just work it out from how many contracts you’re trading and you’ll have made around $100 per contract)
I personally traded 11 contracts on ThinkorSwim and 18 on OptionsXpress, so I made a total net profit of $2,722.35 after broker fees.
That’s pretty good for doing nothing!
I’ve uploaded screenshots below of my accounts so you can see how I’ve worked this out.
If you want to start making money as easily as this yourself, be sure to attend our next free online tutorial
click on the link below for full details:
The Secret of Making Money Trading Options
Here are the screenshots of this month’s trade
OptionsXpress: Total profit $1,665.60
Thinkorswim: Total Profit $1,065.75(post trade balance minus pre-trade account balance)
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Posted by
Trading Desk at
August 23, 2010 | Category
general
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Let’s face it. Last weeks economic data was not good for the bulls. A lot of commentators were saying that after the awful figures from Phily Fed Survey and new jobless claims the US is already in another recession. I don’t know about that but this week should again give us another interesting look at the economy with GDP figures and new housing starts.
On Friday a late session rally erased the bulk of losses, but the Dow suffered its second straight weekly loss. The Dow fell 57.59 points to close at 10,213.62. The SPX lost 3.94 points to end on 1,071.69. Our play won by a mile!
The late rally was probably because Friday was options expiration and a lot of people were buying back to close their short positions.
One interesting thing we saw last week was merger activity has not been bullish for the stock market. Normally, merger news lifts the entire market, but this has not been the case of late. Last week we got a couple large merger announcements including Intel’s purchase of McAfee and BHP Billiton’s hostile bid for Potash and the market did not react at all. What this means long term I have no idea but I thought I would raise it!
This week will be light on market moving economic news with earnings announcements far and few between. The economic calendar includes some key data on housing, as well as the durable goods orders report and the GDP release.
Should be a quiet week……but I doubt it!
Until next time.
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Thursday saw the markets tumble on the back of disappointing economic data. And with that fall it confirmed our position was another winner!! On a $10,000 account you would have made $1000. Not bad for a few weeks return and for no work!
The Dow fell 144.33 points to close at 10,271.21. The SPX gave up 18.53 points to close at 1,075.63. Our play will be confirmed a winning trade today at the open and you will see your profits in your account around 12.00pm EST.
Thursday’s session got off to a rough start following an unexpected rise in jobless claims. For the week ending August 14, claims rose to 500,000 from 488,000 in the prior week. Compared with the month ago period, claims are up 6 percent with the four-week moving average at 482,500. This is the highest reading for this moving average since last December. This is not good. Who ever heard of a jobless recovery?
Things then got worse. The manufacturing sector got bad news from the Philly Fed Survey. This index fell to -7.7 from 5.1 in July and well below estimates for a reading of 7.0. New orders were also negative at -7.1 and this raises concerns about August’s manufacturing report, especially with the Empire State Index also soft.
These markets are still range bound but the SPX did not break that 1100 barrier and never really took out properly the 1092 level. This was a classic retest and I will be looking at the SPX retesting the 1056 level shortly. If it breaks that then the uptrend we have seen since July has stopped and we may well head lower from there.
We will be looking to get a new play on early next week.
Until next time.
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Posted by
Trading Desk at
August 19, 2010 | Category
general
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Stocks finished in the black Wednesday, but finished well off their intraday highs. The Dow gained 9.69 points to close at 10,415.54. The SPX tacked on 1.62 points to close at 1,094.16.
Our play closes tomorrow morning at the open with the settlement price of the SPX being determined by the opening price print of each component stock on Friday. Our play is therefore very much looking like a winner……but to be confirmed!
Not much to say about yesterday other than the Dow once again found it tough to break through 10,500 and the SPX failed at 1,100 agian. Today’s (Thursday) session will be highlighted by General Motors IPO announcement and data on jobless claims, leading indicators and the Philly Fed Survey.
Until next time.
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Posted by
Trading Desk at
August 18, 2010 | Category
general
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The Bulls came out in force Tuesday thanks to merger activity and earnings news. The Dow gained 103.84 points to close at 10,405.85. The SPX added 13 point to close on 1,092.54. Our play is still looking good.
There was good news from Wal Mart and Home Depot on the earnings front and both raised their yearly forecasts.
In economic news, industrial production rose 1.0 percent when a milder gain of 0.6 percent was expected. This helped ease the talk of a double dip, though housing starts continued to show weakness. Starts were up 1.7 percent in the month, but were below estimates and were only higher because June’s figure was revised lower. The general feeling in the media is that housing has hit a bottom, but there is very little evidence of a bounce at the moment!
What was key Tuesday was that the Dow failed to break its 200 day moving average and the SPX did not close materially higher than its 1090 level despite a good effort to give it a go intraday.
Until next time.
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